The eagerly anticipated (and a tad bit delayed) new wage code is here. The 4 new regulations seek to standardise and simplify the laws while embracing a wider range of workforce under its purview. The codes will likely be implemented in the first week of July. Officials had said in December 2021 that labour being a concurrent subject, all the regulations will be implemented at one go (referring to the drafting being done in 2021).
Some of the salient features of the new wage code 2022 include a 4 days work week with better retirement funds. Here are some of the significant changes introduced that will affect the overall corporate culture in India.
4 Days Work Week
Woah woah! Hold your horses buddy! Don’t get too excited. This comes with a catch. Under the new rule, to compensate for the missing work hours, the employee will punch in 12 hours a day at work. Weekly working hours are still capped at 48 hours for both 4- or 5 days work week.
Under the Factories Act overtime cap has been increased from 50 to 125 hours.
Employees will take home a lesser salary now. The basic salary should be at least 50 percent of the CTC according to the new code. Currently in most corporates and unorganised sectors, the basic salary is about 20-25 percent of the net CTC. This becomes trickier for PF.
Full and Final Settlement
Within the last two working days of the employees, Full and Final settlement must be done, following their termination, resignation or removal from the employment.
Appointment Letter Is Now A Legal Contract
An appointment letter must contain the following according to the OSH code and will abide as a legal contract between the employer and the employee
- Name of the employee
- Employees father’s name
- LIN number (Labour Identification Number)
- Category of Skill
- Date of joining
- Salary as per the new wage code 2022
- Allowances if any
- Growth and promotion opportunities with the employer
- EPFO and ESIC benefits
- Health insurance etc.
- Information pertaining to the job
- Any other information etc.
What do you think the GOI missed in the new wages code 2022?